Communities and Culture Committee

Inquiry into the Funding of Voluntary Sector Organisations in Wales

Purpose

As the representative body for providers of housing related support, Cymorth Cymru thanks the Committee for the opportunity to present this paper and contribute to its review of third sector funding.

Our members are very grateful to the Welsh Assembly for its commitment to and understanding of the contribution their work makes to the achievement of wider social policy goals. This understanding is not replicated across the UK, nor the financial commitment that the Assembly has made in recent years.

Unfortunately, what the Assembly and its partners in the sector have achieved for vulnerable people in Wales through housing related support is in danger of being undermined by Supporting People Teams being forced into commissioning and procurement practices that are driven by cost not quality and the need to prop up other less well managed and successful local authority budgets.

The purpose of our paper is to outline the major issue we believe faces our third sector members and potentially all third sector organisations that work with local government to deliver public services - LA commissioning and procurement pressures and practices. We would also like to offer a way forward that we believe could:

redefine how we assess whether we are spending public money wisely;
ensure quality services are delivered;
promote high quality employment opportunities;
put the needs of citizens at the centre of service delivery and design;
support the sustainability agenda; and
support community cohesion.

Background

Our members work with a wide range of client groups and access a number of funding streams, the key one being Supporting People (SP).

Most SP funding (just under 70%) is currently passed from the Welsh Assembly to local authorities (LAs) either as Supporting People Grant (SPG) for clients with long term support needs (e.g. older people, people with physical and/or learning disabilities, and people with mental health issues) or in their role as an Accredited Support Provider (ASP) for Supporting People Revenue Grant (SPRG) for crisis intervention or short term support (e.g. temporary accommodation for people experiencing or at risk of homelessness, people with drug/alcohol/substance misuse issues, families fleeing domestic violence etc.). The remaining 30% is passed directly to other ASPs (third sector organisations and housing associations) to fund temporary/crisis intervention work under SPRG.

Wales is the only part of the UK that has this arrangement with two funding streams and it the view of our members that this has been central to SP in Wales being more successful and stable than in neighbouring countries as it has protected those services funded directly by the Welsh Assembly from the aggressive procurement practices some LAs are pursuing.

When SP was introduced in 2003, the Welsh Assembly was faced with a dilemma: there was a principle established with the Welsh Local Government Association that ringfenced funding would be avoided and subsiduarisation pursued. However, in relation to SP, those involved in the provision of housing related support were convinced that without protection many services for vulnerable people would be at risk. These concerns were particularly prevalent among services working with 'politically sensitive’ client groups, especially those which local authorities do not have a statutory responsibility to support. (Unfortunately the client groups it was felt did not need protection are now the focus of re-tendering exercises driven by cost not quality and we believe this is already having serious consequences for the vulnerable people accessing those services).

The Assembly took the decision to safeguard services to politically sensitive client groups by maintaining the central administration of Supporting People Revenue Grant (SPRG) until such a time as Assembly Members, service providers and their clients could be confident that non-ringfenced funding could be administered locally without it having a detrimental impact on services to client groups some view as "undeserving”. In their role as ASPs, LAs still receive 30% of the SPRG budget but the funding allocated directly to non LA ASPs has in many cases been the key determinant in those organisations remaining viable.

Summary of key points

With overspends on other LA budgets there is increasing pressure on SP teams to make savings and this has led to some authorities effectively re-introducing competitive tendering.

We believe that if this trend continues, it will not only undermine the effectiveness of services being provided and destabilise the sector but also potentially threaten the viability of all third sector partners delivering public services on behalf of local government. Most importantly, we believe it puts vulnerable people at risk.

We are concerned that these are important issues, not only for our members, but for all third sector organisations and for the sustainability and quality of public services in Wales.

As described above, SP funding is paid as a grant. Value Wales defines grants as follows:

Grants: funding that can be provided by WAG and other public bodies as a means of offering financial support to third sector organisations to enable them to undertake work, designed and proposed by them, which it wishes to sponsor. A grant may be "general” to assist with the expenses of running and developing an organisation (often grant-in-aid) or "specific” to help carry out a particular project or service. The grant giver is not contracting for a service that forms part of its own business.

However, some local authorities are following procurement practices driven by cost not quality. Value Wales differentiates between grants and procurement describing procurement as follows:

Procurement is the acquisition of goods and services from third party suppliers under legally binding contractual terms where all the conditions necessary to form a legally binding contract have been met. Such acquisitions are for the direct benefit of the contracting authority, necessary for the delivery of its service or for the running of its business.

Communication with our partners in local government indicates considerable confusion between different authorities and between how Value Wales defines terms and the advice given by local authority legal departments.

Recommendations

Our first recommendation is that the Welsh Assembly ensures that the Value Wales definition of a grant and how it should be managed is applied to SP.

Our second recommendation is for the Welsh Assembly to consider and work with us on an ethical public spending framework that Cymorth has been developing with partner organisations. We believe that if put into practice it could:

redefine how we assess whether we are spending public money wisely;
ensure quality services are delivered;
promote high quality employment opportunities;
put the needs of citizens at the centre of service delivery and design;
support the sustainability agenda; and
support community cohesion.

We believe, as deliverers of public services and as tax papers, that public funding should be spent ethically and we have been working with partners to develop a made in Wales approach to the commissioning and provision of services to vulnerable people which is collaborative, ethical and achieves quality and value by making the best use of public funds.

Our objectives in carrying out this work were to:

Develop greater understanding and collaboration between service commissioners, providers and such key stakeholders as services users, their advocates, and family carers.
Maximise the contribution of public spending on vulnerable people to achieve the widest possible social policy objectives.
Enable the Welsh Assembly Government, service commissioners and providers to develop and maintain services of quality and value.

We suggest that the ethical spending of public money should be underpinned by basic principles:

Respecting the Citizen

They fully involve vulnerable citizens in all decisions affecting them
They purposefully seek to secure positive outcomes for individuals rather than a cared-for 'existence’
They promote settings, opportunities and experiences which are the 'least institutional’ achievable
They take account of the aspiration of most citizens - to live in their own home on a domestic scale throughout their life
They secure the trust and involvement of family/carers

Investing in Communities

They enable all citizens to access and participate in neighbourhood facilities and civic institutions
They develop and sustain new networks that involve people in local activities and opportunities
They collaborate with relevant partner agencies (voluntary, statutory and business) to meet local needs and aspirations

Strengthening the Welsh Nation

They invest in a trained, valued and motivated workforce
They promote a culture of innovation and social enterprise
They nurture a vibrant Wales-based and bilingual provider sector
They demonstrate their commitment to environmental and social sustainability through ethical long term investments in the skills, attitudes and resources of citizens and communities.

This work is in its initial stages but we would welcome the opportunity to take it forward with the Welsh Assembly and submit it to the Inquiry to this end.